Personally, I don't like the idea.

Example:

Johnny has 251 posts, and everyone likes him. He decides that he wants my position as a Sup Mod.
He wins, and I lose my job, which I have had for a year and a half because more people like him.

I see flaws left, right and center in this system. Maybe if you are unpleased with the current staff, you can come up with a way that the vast majority of the members can vote on who they want to be fired. But the whole "election" thing just wouldn't work, in my opinion. If we have a position open, and there is a member who is very good, and willing, then we might hire him.